Prime assets to drive Oman property growth in H1

MUSCAT, APRIL 5

Oman’s real estate market is set for steady, selective growth in the first half of 2026, supported by resilient non-oil expansion, disciplined development activity and sustained demand for income-generating assets, according to the 2025 Annual Market Report by Hamptons International.

The outlook follows a solid performance in the second half of 2025, during which Oman’s key real estate hubs — Muscat, Al Duqm, Suhar and Salalah — recorded varied yet complementary trends reflecting their distinct economic roles.

Muscat remained the most active and liquid market, underpinned by government-backed urban regeneration, infrastructure delivery and consistent end-user demand. The report noted that prime assets continued to outperform secondary stock, as investors increasingly favour quality, efficiency and income security. This trend is expected to carry into 2026, with capital values supported by well-located, income-producing assets, while secondary properties face heightened scrutiny over leasing risks and specifications.

Al Duqm continued to strengthen its position as a strategic industrial and logistics hub, driven by expansion within the Special Economic Zone, rising port activity and long-term government investment. Demand remains focused on industrial land, logistics facilities and infrastructure-linked developments. Hamptons International said the outlook for Al Duqm is “stable to positive” over the long term, with income-backed assets expected to outperform more speculative land-driven investments.

In Suhar, market conditions remained stable, supported by consistent demand for warehousing, manufacturing and port-related industrial space. Backed by an established logistics ecosystem, the city is expected to maintain steady performance, although upside potential remains limited without further asset enhancement or expansion. Stable yields are likely to persist, supported by durable income streams.

Salalah, meanwhile, is showing improving momentum, supported by tourism-led investment and port-linked logistics activity. The report highlighted strengthening fundamentals across hospitality, mixed-use and logistics assets, driven by seasonal tourism growth and improving regional connectivity. Performance in H1 2026 is expected to remain positive, particularly for assets aligned with tourism diversification and trade flows.

At the macro level, Oman’s economic expansion through 2025 has reinforced the sector’s outlook. Growth has been driven by logistics, manufacturing, tourism and non-oil private sector activity, in line with the country’s diversification strategy under Oman Vision 2040. Continued investment in ports, free zones and industrial clusters, alongside foreign direct investment inflows, is translating into sustained real estate demand.

Looking ahead, the report emphasised that transaction activity will remain selective, with investors prioritising assets that offer predictable cash flows, long lease profiles and strong counterparties. Development pipelines are also expected to remain disciplined, with feasibility increasingly influenced by construction costs, financing conditions and absorption risks.

Rental performance across most segments is forecast to remain stable, with modest upside in logistics, hospitality and prime mixed-use developments. Capital values are expected to hold broadly steady, supported by improving income fundamentals and limited oversupply, although yields may face pressure where asset quality or tenant strength is weaker.

Overall, Hamptons International said the market is transitioning towards fundamentals-driven growth, with increasing emphasis on institutional-grade assets and long-term, income-focused investment strategies.